IBM Gets The Message--Instantly

Instant messaging was nearly an instant hit with teenagers. Corporations have been slower to get on the chat line, but the technology's message may now finally be too compelling to ignore. Case in point,
IBM
.

IBM
, through its Lotus division, is not only the leading provider of enterprise IM software called Sametime, but, with 120,000 users, one of its best customers.

At IBM, about one-third of employees use Sametime--and they send three million instant messages every day. One positive impact has been fewer e-mails, according to
Bill
Jones
Bill Jones
, director of infrastructure services for IBM software, adding that fewer e-mails put less strain on servers and could eventually lead to lower maintenance costs. While tens of thousands of his colleagues use Sametime for chat and collaboration, employees are not mandated to use it as an e-mail replacement.

At its core, Sametime sends, encrypts, logs and archives instant messages but it also does real-time data conferencing and collaboration. Free public systems like those from
AOL
,
Microsoft
and
Yahoo
provide simple chat functionality but don't provide any encryption, which means that messages can essentially be ready by anybody. Messages running across free systems generally can't be stored and logged.

Conceived and built as a business product, Sametime lets users share and edit applications like spreadsheets and presentations. For IBM, the online collaboration has meant less travel.

According to
Mike
Loria
Mike Loria
, director of advanced collaboration at IBM, the company now uses Sametime to conduct 8,000 online meetings per month. Last year that amounted to a travel savings of $48 million.

"You can take that [expense] right out of your budget," says Loria. "It's an extremely short return on investment. It's definable and controllable."

According to a survey of about 150 companies by
Osterman Research
, 84% use IM but only 24% have established clear standards and policies.

Despite its popularity, instant messaging is a nascent technology that hasn't yet made its way onto the top of the priority lists for most budget-strapped IT executives.
Gartner Group
says that, as of last year, only 20% of IM accounts belonged to business users, but that number is expected to grow to 50% by 2004. IBM's Sametime has 35% market share, according to
International Data Corp
.

"The market maturity is relatively low," says Loria, who declined to give specifics but said Sametime revenue growth is over 100% annually. IBM's software division was one of the bright spots in its second-quarter earnings reported last week. The group recorded an 8% gain in sales to $3.3 billion.

In the meantime, small companies like
FaceTime
are popping up to write applications for IM platforms. The problem is that AOL's systems don't talk to MSN or Yahoo systems. One of the things that could stymie corporate adoption is lack of standards. The exception is AOL and Sametime.

Loria says AOL agreed to open up its IM platform to Sametime because IBM is not in the media business and therefore poses no competitive threat. There are technology standards being proposed but it will take a few years before they work their way around corporate politics and into products.

If companies are serious about using instant messaging for chat and real-time collaboration, public networks are not the way to go, Loria says, because "security, privacy and archiving don't matter to consumers."

Most agree that basic chatting on desktop PCs is only the tip of the iceberg for instant messaging. Indeed, IM is already being used on pagers, cell phones and PDAs. Standards will help drive corporate adoption, as will a need to archive business transactions or communications done over IM.

Instant messaging, says Osterman, "looks like the Web did five years ago and e-mail did ten years ago."